Over the last 200 years the wetlands of the Upper Tietê and Upper Paraíba do Sul basins, in the southeastern Atlantic Forest, Brazil, have been almost-completely transformed by urbanization, agriculture and mining. Endemic to these river basins, the São Paulo Marsh Antwren (Formicivora paludicola) survived these impacts, but remained unknown to science until its discovery in 2005. Its population status was cause for immediate concern. In order to understand the factors imperiling the species, and provide guidelines for its conservation, we investigated both the species' distribution and the distribution of areas of suitable habitat using a multiscale approach encompassing species distribution modeling, fieldwork surveys and occupancy models. Of six species distribution models methods used (Generalized Linear Models, Generalized Additive Models, Multivariate Adaptive Regression Splines, Classification Tree Analysis, Artificial Neural Networks and Random Forest), Random Forest showed the best fit and was utilized to guide field validation. After surveying 59 sites, our results indicated that Formicivora paludicola occurred in only 13 sites, having narrow habitat specificity, and restricted habitat availability. Additionally, historic maps, distribution models and satellite imagery showed that human occupation has resulted in a loss of more than 346 km2 of suitable habitat for this species since the early twentieth century, so that it now only occupies a severely fragmented area (area of occupancy) of 1.42 km2, and it should be considered Critically Endangered according to IUCN criteria. Furthermore, averaged occupancy models showed that marshes with lower cattail (Typha dominguensis) densities have higher probabilities of being occupied. Thus, these areas should be prioritized in future conservation efforts to protect the species, and to restore a portion of Atlantic Forest wetlands, in times of unprecedented regional water supply problems.